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BlackBerry Limited Message Board

  • nusaiba nusaiba Oct 3, 2013 8:45 AM Flag

    Breaking News!Bernstein downgraded BlackBerry (NASDAQ: BBRY) from Market Perform to Underperform with a new price target of $4.50.

    Bernstein downgraded BlackBerry (NASDAQ: BBRY) from Market Perform to Underperform with a new price target of $4.50.

    Analyst Pierre Ferragu comments, "We upgraded Blackberry to Market Perform on Monday, on the argument that the possible failure of the Fairfax-led initiative was starting to get priced in, making the risk reward of a short position unattractive. But our detailed analysis of the recent filing of Blackberry reveals a cash position far worse than we modelled. Because the company is losing users at a very high pace, has a stretched working capital and massive off-balance-sheet commitments that will turn into actual cash burn in the next 4 quarters, we believe Blackberry is likely to burn close to $2bn in the next 6 quarters on a standalone basis, leading the company into material liquidity problems.

    This makes any floor valuation almost irrelevant and implies that the Fairfax-led initiative has, if our analysis is right, almost no chance to secure support and financing. We see a remotely possible "strategic acquisition" as the only upside risk left on the stock and barely any valuation floor. On that basis we downgrade again the stock to underperform with a new price target of $4.5 per share, which corresponds to the level at which in our view a buy-out becomes a possibility again."

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